Under the proposed changes, the PAYE (Pay-As-You-Earn) rate for this income bracket will be reduced from 30% to 25%, providing financial relief to middle-income earners.
Speaking during a meeting with UDA aspirants at State House, Nairobi, on Wednesday, February 4, 2026, Ruto said the proposals would be submitted to Parliament for consideration and approval.
He also revealed plans for a separate amendment that would exempt Kenyans earning below KSh 30,000 from paying income tax altogether.
“We are saying any Kenyan who earns up to KSh 50,000, we are reducing their taxes from 30 to 25 per cent. 1.5 million working Kenyans will not pay taxes,” he said.
The President explained that these reforms are anchored in positive fiscal outcomes and sound financial decisions implemented since his administration took office in 2022.
“We have begun the process of bringing down taxation. We will be taking a proposal that any Kenyan paying KSh 30,000 coming down will not be paying taxes again,” he added.
Currently, a person earning KSh 50,000 is partly taxed at the 30% band, but their salary is also subjected to mandatory deductions such as NSSF (KSh 3,000), SHA levy (2.75%, KSh 1,375), and Housing Levy (1.5%, KSh 750), leaving a taxable pay of about KSh 44,875.
With current personal reliefs, such a worker pays roughly KSh 5,800 in PAYE, bringing total deductions to over KSh 11,400, and leaving a take-home pay of around KSh 38,600.
If the proposed PAYE cut to 25% is implemented without changing other statutory deductions, the exact gains for a KSh 50,000 earner will depend on how Parliament adjusts the tax bands and reliefs.
The move is seen as a significant step toward easing the financial burden on ordinary Kenyans and stimulating disposable income.
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